Durham-Orange light-rail costs could delay Durham-Wake commuter rail

The rising costs of the Durham-Orange light rail project may delay plans for a 37-mile commuter-rail line connecting Wake and Durham counties.

The Wake County Transit Plan calls for the Wake-Durham Commuter Rail Project to connect Garner and Durham with stops in Raleigh, including N.C. State University; Cary; Morrisville and Research Triangle Park by 2027.

In November, Wake County voters agreed to raise the county’s sales tax rate by a half-cent in order to help fund the 10-year $2.3 billion transit plan, which also includes bus service improvements.

The Wake plan is based on Durham County paying 33 percent of the commuter rail’s local costs, which corresponds to the percentage of track in Durham County.

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In a presentation to the Durham City Council this week, GoTriangle officials indicated Durham County’s existing transit revenue streams wouldn’t support Wake’s timeline for launching the commuter rail, considering the updated financing model for the light-rail project.

Durham County’s transit fund cash balance would face a $170.6 million shortfall in fiscal year 2035 if Durham agreed to a 33 percent share and a 2027 delivery date, said John Tallmadge, who directs GoTriangle’s Regional Services Development Department.

Durham County is paying for its share of the light-rail and commuter-rail projects with money from a half-cent transit sales tax, car rental fees and vehicle registration fees.

The commuter-rail project becomes more viable if it is pushed back 10 years, with an opening date in 2037 with Durham shouldering 20 percent of the costs. Durham County would have to pay cash for the project because financing wouldn’t be viable, Tallmadge said.

Mike Charbonneau, a GoTriangle spokesman, wrote in an email that GoTriangle is providing financial analysis of hypothetical scenarios for commuter rail.

“The Commuter Rail project in the Wake County Transit Plan is still early in the planning process,” he wrote.

Will Allen, who was appointed by the Raleigh City Council to the GoTriangle board, said it was a strategic decision to present a 10-year plan to Wake voters that was aggressive and concrete. It was based on a conservative investment model that delivered and paid for all the promised items by 2027.

Allen also pointed out that Wake County tax dollars can only be spent in Wake County.

“We are restricted,” he said. “We can’t pay for a mile of track in Durham County.”

Delaying the plan could increase the costs due to inflation and other economic factors, he said.

“So it’s important that we meet the schedule promised to the voters,” he said.

Wake commissioners’ chairman Sig Hutchinson was more optimistic about the potential financing challenges.

“We just have to get creative and find some alternative sources of funding,” outside of additional Wake County funding. “We just have to do this work, and this is what we are about — we are about creating as 21st century community in which transit has got to be part of the solution.”

Orange and Durham will split the project’s $1.9 billion local cost with a cost-sharing agreement that is being renegotiated so Durham shoulders more of the cost to prevent depleting Orange County’s transit funds. The local costs increased after the anticipated state share decreased from 25 to 10 percent of project costs and financing and inflation were included in the price tag.

Elected officials in Durham say there is a strong interest in supporting the commuter rail, but the plans may have to be adjusted.

“We do feel it is an important component for the overall plan for transit in the region,” Durham County Commissioner Ellen Reckhow said. “We do want to do it. There is commitment to do it, so we are still looking at when and how that would be funded.”

Options could include raising money from other partners, possibly through a special transportation-related tax in the Research Triangle Park district. The current commuter-rail plan doesn’t include state funding, Reckhow said.

Durham County commissioners Chairwoman Wendy Jacobs said officials will work on solutions.

“I think there obviously will be adjustments that are going to have to be made in terms of the timing on how we will fill in some of the funding gaps,” Jacobs said. “The important thing is we are as committed to doing the light rail as we are to doing the commuter rail.”